Quarterly report pursuant to Section 13 or 15(d)

Advertising Costs

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Advertising Costs
6 Months Ended
Jul. 14, 2013
Advertising Costs  
Advertising Costs

6.                        Advertising Costs

 

Costs incurred in connection with the advertising and marketing of the Company are included in selling, general and administrative expenses.  These costs include salaries, variable compensation, advertising, media and marketing materials. Advertising production costs are expensed in the period when the advertising first takes place. Other advertising and marketing costs are expensed as incurred.  Advertising and marketing costs amounted to $7.7 million and $18.6 million for the twelve and twenty-eight weeks ended July 14, 2013, respectively, and $8.1 million and $18.0 million for the twelve and twenty-eight weeks ended July 8, 2012, respectively.

 

Under the Company’s franchise agreements, both the Company and the franchisees must contribute a minimum percentage of revenues to two marketing and national media advertising funds (the “Marketing Funds”). These Marketing Funds are used to develop and distribute Red Robin® branded marketing materials, for media purchases and for administrative costs. The Company’s portion of costs incurred by the Marketing Funds is recorded as selling, general and administrative expenses in the Company’s consolidated statements of income.